Baby boomers plan for uncertain futures

Tools

After her husband died four years ago, leaving $2 million in medical bills, Connie Mack decided that she didn’t want to leave a similar burden for her two grown sons.

"I realized the cost of what I had to face, and that no one is around with the kind of money to take care of me if anything happens," said Mack, 71, a native of San Francisco.

Mack is among a growing number of Bay Area residents driving an increase in long-term care insurance sales, with policies designed to help the insured pay for nursing home costs should the time come, said Debra Rauser, a specialist with LTC Financial Partners who covers San Francisco and San Mateo County and who sold Mack her policy.

In the past three to four years, Rauser said she has seen a 5 percent to 10 percent increase in sales. In fact, a higher percentage of Californians own LTC insurance than in any other state, she said.

As the baby boomer generation nears retirement, she expects sales to continue to rise. "That is the only way the 78 million baby boomers [nationwide] will be able to properly plan for the future," Rauser said.

From 2005 to 2020, the over-60 population is projected to increase by 43 percent, to over 200,000, according to the state Department of Aging. In San Mateo County, the over-60 population will increase by 53 percent, to 191,000 from 2005 to 2020, records show.

Program manager Diana Gray, of the state Health Insurance Counseling and Advocacy Program, has also seen an increased interest inLTC insurance. Her agency provides educational counseling on how to pay for LTC, home care, hospice and adult health care.

Gray warned that LTC insurance isn’t for everyone and that policies range from "useful" to "useless." Those thinking of buying should do their homework before signing.

Her clients are also getting younger, Rauser said. Increasingly, they’re in their 40s and 50s, some caring for their parents and looking ahead at future health care costs, she said.

"They’re known as the sandwich generation," taking care of both adolescent children and their parents, Rauser said.

Rauser, whose grandmother is in a nursing home, changed careers from nursing to LTC insurance specialist after realizing what happens to patients after they leave the hospital and become frail.

"My grandmother still remains in a skilled nursing facility after 10-plus years, with Alzheimer’s disease," said Rauser, 51. "After going through her property and all other assets, she ended up on the welfare system."

Fearing just that type of scenario and having just got out from under the millions in medical bills after her husband’s death, Mack said LTC insurance means she won’t have to rely on her children, 42 and 40, for support. "It gives me peace of mind," she said.